An index number of 85 for a later period, with the base period equal to 100, indicates that the measured level has:
Correct answer: B. Decreased by 15 percent
- A. Increased by 15 percent
- B. Decreased by 15 percent
- C. Decreased by 85 percent
- D. Remained unchanged
Explanation
An index of 85 is 15 points below the base value of 100. Therefore, the measured level has fallen by 15 percent relative to the base period, not by 85 percent.
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About Index Numbers
Index numbers measure relative changes in prices, quantities or values over time using a base period. Work includes simple and weighted price indices, aggregate methods, consumer price calculations, percentage change and purchasing power, with attention to choosing a base year and interpreting an index rather than treating it as an absolute amount.
Practise Index Numbers
30 free Index Numbers MCQs from Quantitative Methods, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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